Government launches consultation on draft IR35 legislation
The Government recently launched a review of the changes to the rules to off-payroll working, which are due to be extended to medium and large businesses on 6 April 2020. Under these rules, it will be up to the end client to determine the employment status that applies where services are supplied through personal service companies and other intermediaries. If deemed an employee, the fee payer has to deduct tax and employee National Insurance (NI) contributions at source, as well as pay employer NI contributions and in some cases, pay the apprenticeship levy.
The aim of the review is to ensure the ‘smooth implementation of the reforms’. The review includes gathering evidence through round table meetings with affected businesses and individuals. The review is due to run until mid-February. The limited range of the review suggests that the changes will still go ahead in April.
For those hoping for a change of direction, the publication of draft secondary legislation on 22 January 2020, suggests that there is faint hope of that. These regulations, which supplement the main legislative changes are out for consultation until 19 February 2020. These include the rules that determine when an organisation is small enough to be exempt and define a medium or large organisation that falls within the scope of the changes.
Now is the time to get ready for the changes. We can advise you on whether they will apply to your business. If so, we can assess the status of your contractors and advise you on how best to prepare for the changes.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.